Tax exemption for SNAP-EBT payments?

Accounting & Taxes
1

By US law, all payments made on a SNAP-EBT card are tax exempt. However, Shopify does not seem to have tax exemption settings per payment type, only user or product. We are taking SNAP-EBT payment through Forage, and that works great. Forage properly does not charge tax on the SNAP-EBT payment. However, in Shopify admin, reporting, and on the customer’s receipt, it shows that they paid tax. What’s actually happening:

  • The tax amount is not charged on the customer’s EBT card in Forage
  • Shopify issues a “refund” for the tax amount immediately after the transaction is completed
  • However, the refund is often not calculated properly, so it’s one or two pennies short
  • And the customer sees on their receipt that they paid tax, even though they did not

However, this creates a big reporting and compliance headache for us because everything in Shopify includes tax on these orders. Does anyone have suggestions? How have you worked around this issue?

2

Did you uncheck this in the variant page?

Screenshot 2026-06-03 185508
Screenshot 2026-06-03 185508664×492 7.24 KB

There is also a tax override option when you click on the US in Taxes and Duties

3

Hey @reagan-flh ,
A better approach is to prevent tax from being applied in Shopify in the first place instead of relying on refunds . You can do this by marking EBT/SNAP order as tax exempt using product “charge tax” off tax override or order tagging with automation .This avoid refunds rounding issues and keeps reporting clean . A custom tagging /workflow solution
Example Shopify flow or middleware via Forage is usually needed for accurate compliance reporting. Thank You !